Impact of role in the decision to fail: An exploratory study of terminated projects

Our research examines factors used by public service personnel and their contractors to reach the decision to terminate a project. Two decision-making roles are studied: executives, those with the authority to start or cancel a project, and project managers, those who direct the day-to-day operations of the project. Our exploratory survey research, an initial step in this topic, suggests that different roles cluster critical termination factors uniquely and use different decision weighting levels on these factors. On a second construct, information gathering actions, such as scanning and interpretation, show an indication of bias, particularly sunk cost bias, and this bias is experienced differently by executives and project managers. Interestingly, the scale of a project, in terms of labor-hours, calendar time, or budget, does not appear to be related to perception of ‘failure’. The implications for the management of government safety projects are that care must be taken to understand the differing viewpoints of the two types of decision-makers and that the initial presentation of information concerning a project may influence the perception of a project's outcome. While there are several implications for operations management research, the most critical is that care must be given when surveying “managers” concerning subjective measures of ‘success’ or ‘failure’ as there can be radical perceptual differences by role.